Virginie Chesnais serves as Chief Marketing Officer at the ad‑technology analytics firm Happydemics. For many years, gamers have looked at in‑game advertising with suspicion, and their wariness is understandable. The reputation of ads in video games is mixed at best; players often encounter redirects to unrelated sites or apps, misleading content, or cumbersome close buttons that are difficult to locate, all of which generate frustration. A recent study conducted by eMarketer highlighted that 52 % of gamers would abandon a session if they ran into several intrusive ad elements.
Losing half of an audience at the moment you are trying to engage them is hardly an effective approach. However, advertisements do not have to be synonymous with annoyance. The same research indicated that one in five gamers would actually increase the frequency with which they played a title if the in‑game ads were high‑quality and well‑integrated.
With Xbox currently piloting an ad‑supported game‑streaming platform and the overall cost of playing continuing to climb, there is a genuine opportunity for premium‑grade advertising to find a comfortable niche within the gaming ecosystem. The argument for introducing a modest ad‑for‑games model is more compelling than many assume, especially when we look at the success of linear media. Services such as Netflix, Disney+ and other streaming giants have demonstrated that a stable subscription revenue can be supplemented profitably by offering lower‑priced, ad‑supported tiers. Should Xbox’s experiment prove viable, it could not only preserve its existing subscriber base but also unlock an entirely new, previously untapped revenue stream at a moment when the brand is seeking fresh sources of income.
The relevance of this development is underscored by the fact that console gaming is increasingly positioning itself as a premium offering. Prices for games, consoles, accessories, and downloadable content have been steadily rising, making it harder for the average consumer to justify the expense.
This creates a barrier that discourages many potential players from entering the market. Xbox itself has stated that, when executed correctly, advertising can help lower the cost of access to gaming experiences. The mobile gaming sector already provides evidence that ad‑supported tiers can open doors for players who might otherwise be unable to afford large upfront purchases. Crucially, any advertising model Xbox introduces would remain optional.
Players who prefer an uninterrupted experience could continue to pay a subscription fee to avoid ads, while those willing to tolerate a short commercial break could enjoy a reduced‑price or even free access option. By offering a two‑tier system, Xbox hopes to keep its loyal fan base satisfied while simultaneously making games more approachable for newcomers. Although concrete survey data on this specific rollout are not yet available, it is reasonable to assume that a large majority of gamers would accept a 30‑second advertisement if it granted them an hour of gameplay in a beloved or brand‑new title.
Xbox likely has internal data supporting this hypothesis. Happydemics’ analysis of 285 in‑game campaigns across the United Kingdom and North America reveals that in‑game advertisements consistently outperform television, social media, and other online formats when it comes to ad recall and attribution. Players are more likely to remember an ad they saw while playing and to correctly associate it with the sponsoring brand. This advantage becomes even more pronounced when ads are placed "around the game"—for example, during the loading screen or before the game launches—rather than embedded directly within the gameplay.
Our data indicate that these peripheral placements generate higher recall and clearer brand attribution than intrinsic in‑game placements. The distinction matters because while we can often recall ads seen on TV or scrolling through social feeds, that recall does not always translate into a strong brand connection.
Gaming appears to occupy a unique position in this regard, which explains why companies such as Xbox and Electronic Arts are increasingly exploring ad‑based revenue models. It is also essential to note that Xbox’s initial plan focuses on pre‑game advertisements, not intrusive in‑game pop‑ups. Pre‑game ads are less likely to break immersion, preserving the player’s experience while still delivering brand messages.
In‑game ad formats, on the other hand, tend to excel further down the marketing funnel, delivering stronger lifts in brand image, consideration, interest, and overall likability. A hybrid approach that combines both pre‑game and in‑game ads could offer advertisers a comprehensive solution, though it might also provoke greater pushback from the player community.
Xbox has pledged that any ads will be non‑intrusive. By confining ads to the period before gameplay begins, the company aims to avoid disrupting the immersive experience that gamers cherish.
This strategy benefits both players—who maintain a seamless experience—and advertisers, who want their messages to be part of the experience rather than a nuisance. Relevance will be key. Nobody wants to see an advertisement for cat food if they don’t own a cat, or a promotion for a game they have already completed.
By delivering contextual, personalized ads that make sense for each player, Xbox can minimize the risk of users abandoning the session while providing brands with an effective platform to reach fresh audiences. Nevertheless, Xbox is venturing into relatively uncharted territory. The first unknown is how players will react to these new ad formats; the second is whether the revenue generated will be sufficient to sustain the model over the long term.
The move toward ad‑supported game streaming reflects a bold, risk‑taking attitude from Xbox CEO Asha Sharma, who has demonstrated a willingness to experiment with innovative business models. Only time will reveal whether this gamble pays off. Historically, many of our gaming‑ad initiatives have revolved around "watch an ad, earn an extra life" mechanics. Xbox’s proposal, however, asks players to watch an ad simply to access a game they already own.
Our current data set does not yet provide a clear picture of how this will be received. Yet broader research on ad‑format perception shows that descriptors such as "non‑intrusive" and "immersive" rank among the most positively viewed attributes. If Xbox—and potentially other platforms in the future—aim to make advertising a sustainable component of gaming, these two metrics will be crucial to monitor. In my view, Xbox will neither be the first nor the last major publisher to trial this approach.
Advertising has existed in gaming for many years, but often without the player’s experience as the primary focus. Should Xbox succeed in delivering ads that respect the gamer’s immersion while offering tangible cost benefits, it could pave the way for similar strategies across the industry, ultimately making video games more accessible to the everyday player.